The True Cost of Setting Up a Limited Company in the UK (2026 Fees)
Setting up a limited company involves both one-off setup costs and ongoing statutory fees. Understanding what you will pay — and when — helps you budget properly from the start and avoid surprise invoices at your first year end.
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For step-by-step instructions on choosing a name, share structure, and Companies House online submission, read our companion guide: How to Register a Limited Company in the UK: Step-by-Step Guide.
One-Off Statutory & Setup Costs
Companies House digital registration fee — £100
This is the mandatory government fee paid directly to Companies House to incorporate digitally. It increased from £50 to £100 on 1 February 2026. This is a fixed statutory fee that applies whether you register directly or through an accountant. Same-day digital registration is available for £156.
Accountant's incorporation & setup packages — £200 to £500
Most accountants offer fixed-fee formation packages that cover more than just submitting paperwork. For example, Liberate Accountants offers four transparent formation tiers:
- Starter Ltd (£200): Registration, CT setup, share structure advice, and 1 year registered office.
- VAT-Ready (£300): Formation plus VAT registration and first return review.
- Employer-Ready (£400): Formation, VAT, and PAYE scheme registration.
- Launch Plus (£500): Multi-shareholder setups, alphabet shares, and 60-min tax strategy session.
Registered office address service — £100–£200 / year
If you do not want your home address visible on the public Companies House register, a professional registered address service forwards official Companies House and HMRC correspondence while keeping your domestic address private.
Annual Ongoing Compliance Costs
Operating a limited company incurs regular statutory obligations that do not apply to sole traders:
Annual Confirmation Statement — £50 statutory fee
Every company must file a confirmation statement once a year verifying that its directors, shareholders, and registered office details remain accurate. The statutory Companies House fee is £50 (increased from £34 in February 2026).
Annual Accounts & Corporation Tax Return (CT600) — from £65/month (£750/year)
Within nine months of your financial year end, statutory accounts must be submitted to Companies House and a CT600 return to HMRC. Liberate Accountants provides fixed-fee accounts and corporation tax filing from £65 per month (£750/year) for companies with up to 3 team members, and a special package from £625/year for non-VAT registered micro-entities.
Payroll Processing — from £25/month
If you draw a director's salary or hire employees, payroll must be submitted to HMRC under Real Time Information (RTI) each pay run. Dedicated payroll for 1–2 staff starts from £25/month.
Bookkeeping & VAT Returns (if registered)
Accounting software subscriptions (such as Xero, QuickBooks, or FreeAgent) cost roughly £15–£35/month. Ongoing professional bookkeeping starts from £150/month.
What to Budget in Year One
| Item / Service | Typical Cost (2026 Rates) | Frequency |
|---|---|---|
| Companies House digital incorporation | £100 | One-off (Statutory) |
| Professional formation & tax setup | £200–£400 + VAT | One-off |
| Registered office address service | £100–£200 + VAT | Annual |
| Annual accounts preparation & CT600 | £625–£950 + VAT | Annual (or monthly) |
| Annual Confirmation Statement | £50 (gov) + filing fee | Annual |
| Payroll processing (1–2 directors) | £300 + VAT | Annual (£25/mo) |
| Accounting software (Xero/QuickBooks) | £180–£360 + VAT | Annual subscription |
Are Accountancy & Formation Fees Tax-Deductible?
Yes. Accountancy fees incurred for preparing statutory accounts, corporation tax returns, and ongoing business bookkeeping are 100% allowable business expenses that reduce your company's Corporation Tax liability.
Formation fees incurred specifically to bring the company into existence are treated as pre-trading preliminary expenses and can generally be offset once trading begins.
Frequently Asked Questions
Q: Is it cheaper to stay as a sole trader?
A: Staying a sole trader has fewer statutory filing costs (no Companies House fees, no confirmation statements). However, once profits exceed approximately £35,000–£40,000, the limited company structure typically delivers substantial National Insurance and tax efficiencies that outweigh the additional compliance costs. Use our Director Tax Calculator to compare take-home pay.
Q: Can I file company accounts myself to save money?
A: Legally, directors can file their own accounts. However, errors in corporation tax deductions, capital allowances, or statutory disclosures can result in significant HMRC penalties and overpaid tax that far exceed the fee of a qualified ACCA accountant.
Want complete fee certainty with no hourly charges? Review our Fixed-Fee Accountant Pricing or explore our Company Registration Services.
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